FDH PLC IPO FDH Bank PRE-LISTING STATEMENT FDH Bank

Offer for Sale of 979,175,000 Ordinary Shares and Offer for Subscription of 401,031,250 Ordinary Shares each at an Offer Price of MWK10.00 per Share and admission to trade on the Stock Exchange A copy of the Pre-Listing Statement has been delivered to and registered by the Registrar of Financial Institutions (‘Registrar’). The Registrar has not checked and will not check the accuracy of any statements and they accept no responsibility therefor or for the financial soundness of FDH Bank Plc or the value of the securities offered. The Registrar registered this Pre-Listing Statement on th26 June 2020

CORPORATE ADVISORS PRE-LISTING STATEMENT Lead Corporate Advisor Legal Advisor This Pre-Listing Statement is in respect of an Offer for Sale of up Ernst & Young Tembenu, Masumbu & Company to 979,175,000 ordinary shares and Offer for Subscription of up to Chartered Accountants Malawi Gelu House 401,031,250 ordinary shares (‘Offer Shares’) each at an Offer Price of Apex House, Kidney Crescent Kamuzu Procession Rd MWK10.00 per Share and admission to trade on the Malawi Stock P.O. Box 530 P.O. Box 2777 rd Blantyre, Malawi Lilongwe, Malawi Exchange with effect from the commencement of trading on Monday, 3 Tel +265 (0) 1 876 476 Tel +265 (0) 1 756 286 August 2020 (‘the Listing Date’). [email protected] [email protected] Reporting Accountant Transfer Secretary This Pre-Listing Statement is not an invitation to the public to subscribe for shares but is issued in compliance with the rules and requirements of the Deloitte NICO Asset Managers Limited for the purpose of giving information to the public Chartered Accountants Malawi Chibisa House P.O. Box 187 19 Glyn Jones Road with regard to FDH Bank Plc (‘FDH’, the ‘Bank’ or the Company’). PCL House P.O. Box 3173 Kaohsiung Road Blantyre, Malawi The information in this Pre-listing Statement has been extracted, in Blantyre, Malawi Tel +265 (0) 1 832 085 summarised form, from the full Prospectus to be issued by FDH on Tel +265 (0) 1 822 277 [email protected] th [email protected] Monday 29 June 2020. This Pre-listing Statement is not complete and Sponsoring Broker Media and Communications does not contain all of the information that investors should consider before subscribing for Offer Shares. Prospective investors should read Continental Capital Limited Corporate Graphics Limited the Prospectus in its entirety, including the ‘Risk factors’ section in the 1st Floor, Ulimi House 31 Chilembwe Road Prospectus, which describes certain risk factors that should be considered Sharpe Road P.O. Box 2455 P.O. Box 1444 Blantyre, Malawi before making an decision. Blantyre, Malawi Tel +265 (0) 1 879 135 Tel +265 (0) 1 830 679 [email protected] The Issuer and nature of business [email protected] ▶ FDH Bank Plc was incorporated in Blantyre, Malawi on 16th May 2007, Underwriter Underwriter with registration number 8328 under the Companies Act, 1984, as repealed by the Companies Act, 2013 (the ‘Act’), as a private limited First Discount House Limited Cedar Capital Limited Umoyo House Livingstone Towers liability company P.O. Box 512 P.O. Box 3340 ▶ The Company was re-registered as a public limited liability company Blantyre, Malawi Blantyre, Malawi under the Companies Act, 2013 on 3rd June 2020 Tel: +265 (0) 1 820 219 Tel: +265(0)1 831 995 ▶ The Bank is also registered with the Reserve Bank of Malawi (‘RBM’) [email protected] [email protected] as a and authorized dealer for exchange control Underwriter Receiving Bank purposes Reunion Company Limited FDH Bank Plc ▶ The Bank’s registered office is situated at Umoyo House, Victoria Reunion House, Maselema Umoyo House Avenue, P O Box 512, Blantyre, Malawi Private Bag 242 P.O. Box 512 ▶ The principal function of FDH is to provide banking services through Blantyre, Malawi Blantyre, Malawi Tel: +265 (0) 1 874 4006 Tel +265 (0) 1 820 219 its main divisions of Retail Banking, Corporate Banking, International [email protected] info@ fdh.co.mw Banking, Structured Trade , Treasury Management, Corporate Receiving Bank Auditors Advisory Services, Asset Finance and the related products are: ▶ Current accounts Standard Bank Plc Deloitte ▶ Savings accounts Standard Bank Centre Chartered Accountants Malawi African Unity Avenue PCL House ▶ Call and fixed deposits P.O. Box 30380 Kaohsiung Road ▶ Overdrafts and Lilongwe, Malawi Blantyre, Malawi ▶ Foreign exchange and international trade transactions Tel: +265 (0) 999 331 372 Tel +265 (0) 1 822 277 ▶ Custodial services [email protected] [email protected] ▶ Financial advice to corporate and private clients Attorneys ▶ The Bank currently employs approximately 700 people. st Mbendera & Nkhono Associates ▶ As at 31 March 2020, FDH acquired the entire equity of MSB 34 Link Road, Namiwawa Properties Limited (‘MSBP’). MSBP is a real estate investment company Off Independence Drive whose registered address is FDH House, Corner Victoria Avenue P.O. Box 1785 Blantyre, Malawi and Chilembwe Road, P.O. Box 512, Blantyre, Malawi. Information Tel: +265 (0) 1 822 027 and relevant disclosures on MSBP are included in Appendix 7 of the [email protected] Prospectus The IPO timing of the outcome of these discussions is presently unknown ▶ Initial Public Offer of MK13,802,062,500 in the ordinary share capital ▶ GoM acquired a 5.04% equity stake in FDH by virtue of the acquisition of FDH as follows: by FDHFHL of MSB No. of shares MWK ▶ MSB ESOP (‘MESOP’) was incorporated in 2016 to enable MSB Offer for sale 979,175,000 9,791,750,000 employee ownership in the shares of FDH Offer to subscribe excluding preference shares 89,931,250 899,312,500 ▶ FDH related companies are as follows: Offer to subscribe by preference share holders 311,100,000 3,111,000,000 ▶ MSBP: MSBP is a real estate investment company Total offer to subscribe 401,031,250 4,010,312,500 ▶ FDH Money Bureau Limited (‘FDHMBL’): FDHML offers forex Offer price 10.00 trading and international money transfer services including Total IPO 1,380,206,250 13,802,062,500 MoneyGram, Western Union, Hello Paisa and Mukuru Authorised number of shares at no par value 10,000,000,000 - ▶ First Discount House Limited (‘FDHL’): FDHL offers investment No. of shares MWK products to individuals and corporate clients Existing shares in issue and fully paid for 6,500,000,000 - Number of shares post IPO 6,901,031,250 - Indicative shareholding Market capitalisation post IPO - 69,010,312,500 The indicative shareholding post IPO is set out below: Shareholder No. of shares Interest ▶ 311,100,000 ordinary shares out of the 401,031,250 ordinary shares FDHFHL 5,437,625,000 78.79% for subscription have been ring-fenced for subscription by preference MSB ESOP 83,200,000 1.21% shareholders Public 1,380,206,250 20.00% ▶ The IPO will constitute 20% of the ordinary share capital of the Bank Summary of Financial information Purpose of the IPO and use of proceeds The financial information in this document has been prepared in ▶ Application for a listing on the Main Board of the MSE of 20% of the accordance with International Financial Reporting Standards (‘IFRS’) as issued ordinary shares of FDH by way of an offer for sale and offer for promulgated by the International Accounting Standards Board (‘IASB’). subscription as prescribed in the Listings Requirements to: ▶ Deloitte were the external auditors of FDH for the years ended 31st ▶ Raise capital to support future growth December 2017, 31st December 2018 and 31st December 2019 and ▶ Fulfil a contractual obligation with the Government of Malawi reported on the financial statements without qualification (GoM), as part of the MSB acquisition, to list FDH and allow GoM ▶ Forecast financial information presented in this Pre-Listing Statement to dispose of its entire shareholding in FDH has been sourced from the Reporting Accountant’s Report in ▶ Allow existing shareholders to dispose part of their shareholding Appendix 2 of the Prospectus in FDH ▶ The expenses of the listing fees will be paid out of the proceeds of the Historical and forecast earnings summary Offer Description FY17A FY18A FY19A FY20F FY21F (Loss)/profit before tax (MWK’mn) (1,986) 8,157 11,743 10,114 15,068 FDH current shareholders and related companies (Loss)/profit after tax (MWK’mn) (1,004) 5,965 7,846 7,080 10,548 Basic/earnings per share before tax (0.29) 1.18 1.70 1.47 2.18 (MWK)* FDHFHL Basic/earnings per share after tax 0.15 0.86 1.14 1.03 1.53 (MWK)*[a] 93.68% 100% 100% GoM Dividends per share (MWK) [b] - - 0.15 0.58 0.84 5.04% FDH Money FDH Discount Dividend cover (Times) [a/b] - - 7.54 1.77 1.82 FDH Bureau House 1.28% *EPS has been calculated on the number of shares that will be in issue post the IPO for the historic and forecast MSB ESOP 100% periods MSBP Summarised historical and forecast income statements Currency: MWK mn FY17A FY18A FY19A FY20F FY21F ▶ FDHFHL is a diversified and financial solutions company Gross interest income 17,116 14,781 16,344 18,652 28,920 with interest in banking, discount house operations, forex bureau Interest expense (8,924) (6,735) (7,767) (5,235) (6,137) operations as well as investment management. The shareholding in Net interest income 8,192 8,046 8,577 13,417 22,783 FDHFHL is as follows: Commissions and fee income 13,074 21,020 25,813 20,155 18,670 ▶ M Development Limited (‘MDL’): a company with interests in Total income 21,266 29,066 34,390 33,572 41,453 property and . MDL has a 55% equity stake in Administrative costs less FDHFHL depreciation and amorti-sation (8,919) (9,337) (8,994) (8,811) (9,328) ▶ Old Mutual (Malawi) Limited (‘OMMALA’) has a 21% equity Staff costs (6,403) (7,921) (9,209) (10,172) (11,758) stake in FDHFHL and is part of an international long-term savings, EBTDA 5,944 11,808 16,187 14,589 20,367 insurance, investment and protection group commonly referred Depreciation and amortisation (1,903) (2,215) (3,961) (4,066) (4,506) to as Old Mutual with approximately 12 million customers Profit before impairment losses 4,041 9,593 12,226 10,524 15,861 worldwide and was established over 166 years ago Net impairment losses (6,027) (1,436) (483) (410) (794) ▶ Old Mutual Life Assurance Company Limited (‘OMLAC’) has a (Loss)/profit before taxation (1,986) 8,157 11,743 10,114 15,068 19% equity stake in FDHFHL and is also part of the Old Mutual Taxation 982 (2,191) (3,897) (3,034) (4,520) group (Loss)/profit after tax (1,004) 5,966 7,846 7,080 10,548 ▶ FDH ESOP Limited (‘FDHEL’) was incorporated in 2009 to facilitate the Employee Share Ownership Scheme in FDHFHL and holds a ▶ The above profit forecasts for the Bank do not incorporate financial 5% equity stake in FDHFHL forecasts of MSBP for the year ending 31st December 2020 and 31st ▶ Prospective investors are advised of ongoing discussions between December 2021 and FDH has prepared the profit forecasts based on MDL and the Old Mutual group of a possible transaction involving the following assumptions: part of MDL’s shares in FDHFHL by Old Mutual group and the ▶ Deposits are projected to increase at an average of 20% by virtue of the Bank’s digital offering marketing drive Investment considerations ▶ Loans are expected to grow by an average of 30% year on year ▶ FDH is an innovative bank over the next 5 years due to an improving economic and business ▶ FDH utilises an integrated digital core banking platform to carry landscape out transaction processing requirements ▶ Interest income is expected to increase by virtue of the increasing ▶ FDH has prioritised the upgrade of the server and processing book capabilities to improve overall performance of its systems ▶ Interest expense is expected to increase year on year due to the to deliver enhanced product development capabilities and increase in deposits operational efficiencies ▶ The Malawi Kwacha is expected to remain relatively stable against major foreign currencies and only depreciate by 5% year on year ▶ Robust credit model ▶ Non-interest income is expected to decrease year on year as a ▶ The Bank achieved an NPL ratio of 0.8% compared to the banking result of a reduction in commissions by 18% sector’s NPL ratio of 6.3% as at 31st December 2019 ▶ Bad debt provisions are expected to increase in line with the growth in the loan book due to the fact that IFRS 9 provisions are ▶ Sound key performance indicators also carried out on performing loans ▶ Total income of MWK34.3bn for the year ended 31st December ▶ The NPL ratio is expected to be at 1.2% 2019 ▶ 17.4% compound annual growth rate (‘CAGR’) in total income Summarised historical and forecast balance sheets over the past 3 years MWK’mn Dec17A Dec18A Dec19A Dec20F Dec21F ▶ Profit after tax of MWK7.8bn for the year ended 31st December Cash and cash equivalents 6,815 7,459 6,389 7,504 9,491 2019 Cash with RBM 7,903 7,427 673 7,197 8,860 ▶ 18.8 % CAGR in profit after tax between 2014 and 2019 Placements with other 33,256 31,581 31,751 29,685 13,393 ▶ Total assets of MWK188.7bn as at 31st December 2019 Treasury bill & GoM bond invest- 33,274 39,552 46,955 52,926 69,832 ▶ 13.2% CAGR in its loan book over the past 3 years ments ▶ 34.6% return on equity as at 31st December 2019 Loans and advances 39,180 40,689 56,813 91,799 133,439 ▶ Capital adequacy ratio of 19.6% well above the statutory Other receivables 13,910 13,929 33,413 19,422 20,097 requirement of 15% as at 31st December 2019 Deferred tax assets 3,927 2,009 - - - Property and equipment 5,816 8,086 8,632 8,308 8,904 ▶ Skilled entrepreneurship Intangible assets 2,267 2,010 2,351 2,492 2,940 Right of use assets - - 1,692 1,770 1,983 ▶ Successful acquisition and integration of the loss-making Other investment* 3,702 26 31 31 31 government owned Malawi Savings Bank (MSB) Total assets 150,050 152,768 188,700 221,134 268,970 Shareholders Loan 505 2,729 2,607 2,182 1,182 ▶ Access to markets Customer deposits 114,210 112,570 137,141 176,420 221,682 ▶ Only bank to be represented in 27 districts of Malawi to Other liabilities 21,738 11,625 8,417 7,187 8,222 encompass financial inclusion Interbank borrowings and BAs - 4,504 10,301 - - ▶ Country wide ATM network Long term loans - 5,455 5,761 8,495 6,371 Current taxation liabilities - - 1,550 1,009 924 ▶ International partnerships with Deferred tax liabilities - - 250 - - ▶ European Investment Bank Total liabilities 136,453 136,883 166,027 195,293 238,381 ▶ Netherlands Development Finance Company (FMO) Net asset value 13,597 15,885 22,673 25,841 30,589 ▶ Africa Guarantee Fund

* The balance as at FY17A includes the investment in MSBP which was disposed of in FY18A for MWK3.7bn and ▶ Land O Lakes subsequently re-acquired on 31st March 2020 for MWK5.6bn. This re-acquisition has not been reflected in the ▶ African Export–Import Bank (AFREXIM) forecast balance sheets for FY20F and FY21F ▶ Absa Group Limited ▶ Mauritius Commercial Bank Summarised historical and forecast cash flow statements ▶ Crown Agents MWK’mn FY17A FY18A FY19A FY20F FY21F ▶ Standard Bank SA Cash generated from operations 13,331 924 5,023 8,775 16,611 ▶ Mastercard Taxation claimed/(paid) 67 348 533 (1,516) (3,641) Cash flows from operating ▶ Corporate governance activities 13,398 1,272 5,556 7,259 12,970 ▶ Best practice corporate governance standards according to the Cash flows used in investing Companies (Corporate Governance) Regulations 2016 and RBM activities (1,934) (2,055) (6,530) (1,592) (1,257) Directives have been implemented by the Bank Cash flows from/(used in) financing activities 8,996 7,679 719 (3,911) (4,802) Net increase/(decrease) in cash and cash equivalents 20,460 6,896 (255) 1,756 6,911 Cash and cash equivalents at the beginning of the year 36,899 57,359 64,255 64,000 65 756 Cash and cash equivalents at the end of the year 57,359 64,255 64,000 65,756 72 667 Board of directors Name Qualification Current position Other Directorships Arthur Oginga ▶ Certified Public Accountant (CPA) Group Chief Executive Officer at ▶ UAP Holdings Limited – Executive Director Chairman ▶ Bachelor of Arts in Economics UAP Holdings Limited ▶ Old Mutual Holdings Ltd – Executive Director ▶ Faulu Microphone Bank Ltd – Non-Executive Director ▶ UAP Investment Ltd – Executive Director ▶ UAP Properties (Kenya) – Executive Director ▶ UAP Old Mutual Insurance Uganda – Non-executive Director Dr. Ellias Ngalande ▶ Doctor of Philosophy in Economics Managing Director of FDH ▶ Central African Conference of the Seventh Day Baptist Church Executive Director ▶ Master of Political Economics - Member ▶ Master of Science in Development Economics ▶ Bachelor of Social Science

William Mpinganjira ▶ Chartered Banker Deputy Managing Director of ▶ Malawi University of Science and Technology (MUST) Council Executive Director ▶ Fellow of the Association of Chartered Certified FDH - Member Accountants (FCCA) ▶ M Development Ltd – Director ▶ Master of Business Administration ▶ Public Private Partnership Commission - Commissioner ▶ Master of Science in International Business ▶ Bachelor of Accounting and Finance

George Chitera ▶ Fellow of the Association of Chartered Certified Acting Chief Executive Officer of ▶ MSB Properties Ltd – Executive Director Executive Director Accountants (FCCA), FDHFHL ▶ FDH Financial Holdings Ltd – Executive Director ▶ Masters in Business Administration ▶ First Discount House Ltd – Executive Director ▶ FDH Money Bureau Ltd – Executive Director ▶ Director Dr. Nathan Mpinganjira ▶ Fellow of the Association of Chartered Certified Independent Consultant ▶ M. Development Ltd - Director Non-executive Director Accountants (FCCA) ▶ FDH Financial Holdings Ltd – Director ▶ Doctor of Business Administration ▶ First Discount House Ltd - Chairman ▶ Bachelor of Commerce in Accountancy ▶ FDH Money Bureau Ltd – Director ▶ Diploma in Business Studies Edith Jiya ▶ Master of Science in Strategic management CEO at Old Mutual Malawi ▶ Old Mutual Malawi Ltd – CEO & Directcor Non-executive Director ▶ Bachelor of Business Administration ▶ Old Mutual Life Assurance Co (Mw) Ltd - Director ▶ Diploma in Marketing ▶ Old Mutual Investment Group Malawi Ltd - Chairperson ▶ Diploma in Insurance ▶ Old Mutual Unit Trust Ltd - Chairperson ▶ Old Mutual Pensions Services Co. Ltd - Director ▶ FDH Financial Holdings Ltd - Director ▶ FDH Discount House Ltd - Director ▶ MPICO Plc - Director ▶ Shire River Basin Environmental Financing Project - Chairperson ▶ Archdiocese of Blantyre Social Directorate - Trustee ▶ Insurance Institute of Malawi - Trustee ▶ Malawi University of Science and Technology - Member of university council ▶ Ubuntu Limited - Director Dr Eric James Sankhulani ▶ Doctor of Philosophy Senior Lecturer in Management ▶ Orascon Continental Security Services - Chairperson Non-executive Director ▶ Master of Business Analysis at the Polytechnic, University of ▶ Soche Technical College - Director ▶ Bachelor of Social Science Malawi Patrice C. Nkhono, SC ▶ Master of Laws in International Development Senior Partner at Mbendera & ▶ Britam Insurance Company (Malawi) Limited - Director Non-executive Director Law Nkhono Associates ▶ Carrick Wealth Limited – Director ▶ Bachelor of Laws ▶ MSB Properties Limited - Director ▶ FDH Money Bureau Limited - Chairman ▶ FDH Financial Holdings Limited - Director Mark Mikwamba ▶ Chartered Financial Analyst (CFA) CEO at Old Mutual Investment ▶ Old Mutual Investment Group – Managing Director Non-executive Director ▶ Fellow of the Association of Chartered Certified Group ▶ MPICO Limited - Director Accountants (FCCA) ▶ Open Connect Limited - Director ▶ Bachelor of Accountancy Dr. Ulemu Katunga ▶ Fellow of the Association of Chartered Certified CFO and Board Secretary at ▶ TIL Company Limited (a subsidiary company of AHL Non-executive Director Accountants (FCCA) Medical Aid Society of Malawi Company) - Director ▶ Doctor of Philosophy in Business Administration ▶ Mwaiwathu Private Hospital – Member of Finance and Audit ▶ Master of Business Administration Committee ▶ Diploma in Management Studies Harold Kuchande ▶ Master of Science in Human Resources MD and Head of Human ▶ AMREF Health Africa – Director & Chairperson of HR Non-executive Director Management Resources & Business Committee ▶ Bachelor of Social Science Development at Management ▶ Diploma in the Management of Training Solutions Consulting Malawi Institutions

Judith Penjani Chirwa ▶ Master of Arts in Strategic Management Executive Director of Chisapi ▶ Independent Schools Association of Malawi – Vice President Non-executive Director ▶ Diploma in Education Private Schools & Director

Charity Mseka ▶ Chartered Institute of Management Accountants Non-executive Director ▶ Tilitonse Foundation – Director & Member of the the Finance Non-executive Director (CIMA) and Audit Committee ▶ Master of Science in Strategic Business ▶ Anglican Diocese of Lake Malawi - Chairperson Management ▶ Diploma in Business Studies Gertrude Lynn Hiwa, SC ▶ Master of Law Ministry of Justice Solicitor Gen- ▶ EGENCO Limited – Ex officio Member Non-executive Director ▶ Bachelor of Law eral and Secretary for Justice ▶ Public Private Partnership Commission – Ex officio Member

Disclosures relating to Directors Financial Holdings Ltd and First Discount House Ltd, and the ▶ As at the date of this Pre-Listing Statement none of the directors held Chairperson of Old Mutual Investment Group Ltd any shares in the Company. Furthermore: ▶ William Mpinganjira has indirect non beneficial interest as he is ▶ Edith Jiya has indirect non-beneficial interest as she is CEO and a non-executive director at M Development Limited Director at Old Mutual Malawi Ltd, a Director at Old Mutual ▶ Mark Mikwamba has an indirect non-beneficial interest in Pension Services Co Ltd , Old Mutual Life Assurance Co Ltd, FDH the Company as he is the Managing Director at Old Mutual Investment Group Ltd, and is involved in providing investment Arthur Yapuwa ▶ Fellow of the Association of Head of Internal Audit advice to Old Mutual clients. Further, Mark Mikwamba has Chartered Certified Accountants (FCCA) declared a conflict of interest regarding the IPO valuation due to his ▶ Bachelor of Science in Accountancy involvement on behalf of Old Mutual Malawi in the shareholder Ganizani Phiri ▶ Member of the Information Systems Head of Information discussions disclosed in 2. Shareholders and related companies, on Audit and Control Association Technology (ISACA) page 12 of the Prospectus. Consequently, he signs this Prospectus ▶ Master of Sciences in Information without prejudice to that declaration of conflict of interest Technology ▶ Arthur Oginga has indirect non-beneficial interest as he is non- ▶ Bachelor of Social Science Jones Chabwera ▶ Fellow of the Association of Head of Credit executive director of Old Mutual Holdings Ltd Chartered Certified Accountants ▶ Dr Nathan Mpinganjira has indirect beneficial interest as he is (FCCA) Chairman of FDHL and non-executive director of M Development ▶ Member of the Institute of Chartered Accountants in Malawi Ltd, FDHFHL and FDHMBL (ICAM) ▶ Other than the Managing Director and the Deputy Managing Director, ▶ Bachelor of Science in Accountancy no other directors are employed by FDH on a fixed term or permanent Levie Nkunika ▶ Master of Business Administration Head of Marketing and ▶ Bachelor of Social Science Communication contract basis Sammy S.B Chilunga ▶ Certified Anti-Money Laundering Head of Risk and ▶ There is no existing or proposed contract between any directors and Specialist Compliance FDH ▶ Master of Arts in Banking and Law ▶ Bachelor of Accountancy ▶ No Director has an interest in any contract, arrangement or transaction Bernard Omenda ▶ Member of the Institute of Certified Head of Treasury and entered into by FDH which is or was unusual in its nature or conditions Public Accountants of Kenya Trade Finance or significant in relation to the business of FDH as a whole and which (ICPAK) ▶ Member of the Institute of Certified was effected during the current or immediately preceding financial Investment and Financial Analysts year or was effected during an earlier financial year and remains in any ▶ Qualified Treasury Professional of the Institute of Economic Affairs respect outstanding or unperformed (Kenya) ▶ The Directors have not been awarded any shares by the Company or ▶ Master of Business Administration any compensation to induce them in the promotion of the sale of FDH ▶ Bachelor of Commerce Kawawa Msapato ▶ Master of Science in Strategic Head of Personal and shares pursuant to the IPO and listing Management Business Banking ▶ There are no material loans or guarantees outstanding to any Director ▶ Bachelor of Social Science of FDH as at 31st December 2019 Juliano G. Kanyongolo ▶ Bachelor of Laws Company secretary ▶ No pension or compensation for loss of office is payable to any Dividends independent or non-executive director of FDH ▶ The Directors may by ordinary resolution declare dividends and the ▶ There were two resignations from Board in 2019. Director Dr. Janet Directors may decide whether or not to pay dividends (whether interim Banda, SC, served up to 30th June, 2019, and the Managing Director, or final) and in what amounts based on results from operations, cash Mr. Eric Outtara served up to 30th September, 2019. flows, financial condition, capital adequacy ratios, future expansion ▶ The Directors of the Company are of the opinion that: plans, statutory, regulatory and internal restrictions on the payment of ▶ The Company’s working capital resources will be adequate cover dividends and other relevant factors at any point in time for its current and foreseeable requirements ▶ The Directors may declare and recommend payment of dividend of ▶ The Company’s stated capital is adequate for the purposes of the up to 80% (Eighty Percent) of the profit after tax every financial year business of the Company for the foreseeable future

Underwriting Management ▶ The Offer has been underwritten in full by the underwriters detailed Name Qualification Occupation below. At the date of the Prospectus, none of the underwriters had Dr. Ellias Ngalande ▶ Doctor of Philosophy in Economics Managing Director ▶ Master of Political Economics any interest in FDH Bank ▶ Master of Science in Development Economics ▶ Bachelor of Social Science Underwriter No. of shares Amount % of IPO underwritten shares William Mpinganjira ▶ Fellow of the Association of Deputy Managing Chartered Certified Accountants Director First Discount House Limited 669,106,250 MWK6,691,062,500 62.50% (FCCA) Cedar Capital Limited 200,000,000 MWK2,000,000,000 18.75% ▶ Master of Business Administration ▶ Bachelor of Accounting and Finance Reunion Insurance Limited 200,000,000 MWK2,000,000,000 18.75% Richard Chipezaani ▶ Fellow of the Association of Senior Manager Finance Chartered Certified Accountants ▶ The underwritten shares are the Offer Shares, excluding the 311,100,000 (FCCA) ▶ Bachelor of Accountancy shares ring-fenced for subscription by preference shareholders Chrispin R. Chikwama ▶ Bachelor of Arts in Public Head of Human Administration Resources Litigation Robert K. O. Onyango ▶ Chartered Banker Head of Corporate & ▶ At the time of publication of this Pre-Listing Statement, FDH was in ▶ Master of Science in Statistics Investment Banking litigation proceedings which have not had, during the 12 months’ ▶ Bachelor of Science in Mathematics and Statistics period preceding this Pre-Listing Statement, a significant effect on the ▶ Bachelor of Science in Financial financial position of the Bank Services ▶ Matters being litigated comprise claims arising out employment Mary L. N. Jusab ▶ Bachelor of Social Science in Head of Government Economics and Computer Science and International contracts by former employees and other contracts as well as ▶ Advanced Diploma in Treasury and Organisations litigation taken up by the Bank against customers defaulting on their International Trade loan obligations with the Bank Mwiza Madanitsa ▶ Certified Chartered Accountant Head of Operations, ▶ Bachelor of Science in Accountancy Administration and Procurement Borrowings Victoria T. Mbewe ▶ Certified Prince 2 Practitioner Senior Manager, Digital ▶ The Bank had the following borrowings as at 31st December 2019 as ▶ Certified Digital Banker Financial Services highlighted in notes 15 and 16 of the Reporting Accountant’s Report ▶ Master of Business Administration in Appendix 1 of the Prospectus Lender Facility Currency Approved Tenor Pricing Carrying Application for shares type amount amount ▶ Applications must be made in accordance with the Terms and FDH Financial Unsecured MWK’000 2,500,000 5 6-month 2,606,543 Conditions set out in Appendix 4 of the Prospectus Holdings term loan years average yield Limited for 364 day ▶ Applicants may obtain a copy of the Prospectus, Application Form Treasury bills and Central Securities Depository (‘CSD’) Forms from any registered plus 2%. bank and branch of the Receiving Banks listed in Appendix 3 of Dutch Bank Unsecured USD 7,500,000 5 3 month’s 7,560,770.83 FMO term loan years Libor plus 4% the Prospectus or can download from FDH Bank’s investor page: Land O Lakes Unsecured USD 250,000 2 4% 259, 777.78 https://www.fdh.co.mw/investor/ term loan years ▶ To make a digital application for the Offer Shares, Applicants can use either the FDH OneClick or FDH Mobile Smart App applications as Contingent liabilities detailed in the Terms and Condition in Appendix 4 of the Prospectus ▶ The Directors confirm that, other than as disclosed in the Reporting ▶ Applicants who do not have a CSD account will need to complete Accountant’s Report, there are no outstanding contingent liabilities a CSD form which the Directors are aware of and which may have a material effect ▶ Completed applications shall constitute an offer to FDH for IPO on the Company’s financial position shares, and shall not constitute an acceptance of the Offer contained ▶ At the time of publication of this Pre-Listing Statement, FDH was in in this Pre-Listing Statement litigation proceedings which have not had, during the 12 months’ period preceding this Pre-Listing Statement, a significant effect on the Minimum subscription financial position of the Bank ▶ The minimum subscription required to satisfy the minimum listing criteria as prescribed by the MSE is 30 million ordinary shares Material property leases and location of principal investment bearing an offer value of not less than MWK500mn and a minimum ▶ The Bank conducts its business primarily from leased premises and of 300 shareholders about 55% of the premises are leased from MSBP. About 35% of the ▶ Each applicant must subscribe in multiples of 100 shares with a premises are leased from independent lessors and 10% are premises minimum application of 500 shares. There is no maximum number owned by the Bank of shares or maximum subscription amount that can be applied for ▶ The Company’s headquarters are located in FDH House and Umoyo by Applicants House which are leased properties. There are currently no proposed expansion plans or capital commitments for the FDH operations which Options and preferential rights in case of oversubscription may require further space. In the long term the Bank may consider the ▶ In the event of an oversubscription, bank account holders and option of further leasing where the need arises employees, will at the recommendation of the Directors and the discretion of the shareholders, be given preferential entitlement Documents available for inspection and allotted shares prior to all other applicants. In this instance all ▶ Copies of the following documents relating to FDH and MSBP may be other outstanding subscriptions will be allotted Offer Shares after inspected at the head office of FDH by arrangement with the Company all employees, customers and directors that applied for shares have Secretary during normal business hours on any Business Day for 21 been allotted days from the date of this Pre-Listing Statement: ▶ The Company’s Memorandum and Articles of Association Jurisdiction ▶ Certificate of incorporation and registration ▶ The Offer does not constitute an offer to issue or sell, or an invitation ▶ Material contracts: Underwriting agreements to purchase, or the solicitation of an offer to buy, any securities ▶ Trust Deed and the Rules setting up the Employee Share in, into or from any jurisdiction in which such offer or solicitation Ownership Plan would be unlawful or would require further action in order to be ▶ The audited financial statements of FDH for the financial years lawful, including, without limitation, in, into or from any Excluded ended 31 December 2019, 31 December 2018 and 31 December Jurisdiction 2017 and the auditors’ reports thereon ▶ The reporting accountant’s report on the profit forecast for FDH Directors’ responsibility statement Bank The Directors of FDH Bank, whose names are given in this Pre-Listing ▶ A written statement signed by the reporting accountant setting Statement, collectively and individually accept full responsibility for out the adjustments made by them in arriving at the figures the accuracy of the information given and confirm that to the best of shown in their report giving the reasons therefor their knowledge and belief there are no facts the omission of which ▶ Copies of special resolutions would make any statement false or misleading, that this Pre-Listing ▶ Statement of legal compliance Statement contains all information required by the Act, the MSE Listings ▶ Written consents from advisors Requirements and the Securities Act.

Important Dates and Times Signed in Blantyre, on 24th June 2020, by the Directors of FDH Bank. Event Date Publication of Prospectus and Pre-Listing Statement in local press 29 June 2020 Offer opens at 09:00 on 29 June 2020 Director’s Name Director’s Name Director’s Name Offer closes at 17:00 on 17 July 2020 Arthur Oginga Dr Eric J. Sankhulani Edith Jiya Results of offer submitted to the MSE 24 July 2020 Dr. Ellias Ngalande Patrice C. Nkhono, SC Gertrude L. Hiwa, SC Allotment announcement to public 28 July 2020 William Mpinganjira Mark Mikwamba Judith P. Chirwa Latest date for refund cheques and documents of title to be posted 28 July 2020 Dr. Nathan Mpinganjira Dr. Ulemu Katunga Charity Mseka Listing of FDH on MSE 3 August 2020 George Chitera Harold Kuchande

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